Cabinet mulling law on misleading endorsement by celebrities

New Delhi, Aug 30 (IANS) Even as the average consumer opts for products endorsed by celebrities, the central government is all set to come up with a new law that would make such personalities “accountable for misleading ads”.

The Law and Consumer Affairs Ministry has accepted the recommendation of a parliamentary Standing Committee and decided to impose “stringent provisions including jail term and hefty penalty” of up to Rs 50,00,000 for “repeated offence”, official sources said here on Tuesday.

The Cabinet on Wednesday is likely to give its nod to the “change in the draft law” as being brought into the Consumer Protection Bill, 2015 — already pending before Parliament.

In its report on the Consumer Protection Bill tabled in Parliament in April this year, the standing committee headed by Telugu Desam Party (TDP) lawmaker J.C. Divakar Reddy had mooted giving “adequate legal teeth to advertising watchdog to curb misleading ads”.

The panel also recommended severe penalties like cancellation of licence of those involved in food adulteration, an official source said.

The government has now decided to bring in some “necessary changes” in the Consumer Protection Bill in tune with the spirit of the recommendation of the standing committee.

“The committee strongly feels that misrepresentation of a product, especially of a food product, should be taken very seriously considering the influence of celebrities and individuals and companies. The existing laws are not deterrent enough to discourage manufacturers or publishers from using such personalities for misleading ads,” the parliamentary panel on Consumer Affairs had said.

Among other issues, sources said, the government also accepted in principle the recommendation of the panel that the Central Consumer Protection Authority (CCPA) should be given more functional autonomy. The committee also favoured suitable provision in the new law to empower chief commissioner and commissioners and officials of the CCPA for initiating actions against defaulters.

In fact, industry sources and consumer activists say the issue of celebrities endorsing brands and products, and their punishment if claims made in the advertisements turn out to be misleading and false had first figured in 2012 when a federation of state-level consumer protection bodies had suggested to the erstwhile UPA regime for enacting such a law.

“In September 2012, we had submitted a number of recommendations to the Ministry of Consumer Affairs to protect the interests of the consumers. Most important of them is making celebrities accountable for the claims made in the advertisements endorsed by them,” Amrit Shah, a former chairman of the Consumer Coordination Council, a federation of state-level consumer bodies, told IANS.

Consumer activists had said that a number of complaints have been lodged with the consumers alleging that they were fleeced by brands endorsed by the celebrities.

Activists also say a large number of complaints are against claims of weight loss or protecting hair loss endorsed by the celebrities.

“Celebrities should check for themselves if the claims being made are genuine or not,” says an official in the Consumer Affairs Ministry.

Sources also said that the new changes as proposed in the Bill seeks to make any “false or misleading” endorsement — which would be detrimental to the interest of consumers — a penal offence, punishable with a jail term of up to two years and a fine of Rs 10 lakh for the first such offence.

The new law would also bring in provisions to impose imprisonment of five years along with a fine of Rs 50 lakh for the second and subsequent offences by any defaulter.